Silicon Valley Pioneer Kurtzig Goes After SAP, Oracle

The Wall Street Journal featured Sandra Kurtzig in a 1983 front-page story about successful female entrepreneurs.

Last August, Sandra Kurtzig–one of Silicon Valley’s first female chief executives and the first one to take a technology company public–emerged from retirement with $10.5 million in funding and a new start-up: Kenandy, a company based in Redwood City, Calif., whose software is designed to manage manufacturing processes from the cloud.

Less than nine months later, she’s expanding her company’s core software product, adding financials and order management, changing the software’s name to Social ERP (for Enterprise Resource Planning) and targeting customers that make products.

In the process, she’s pitted Kenandy against both software giants like SAP and Oracle and older manufacturing software companies like QAD, all of which are racing to redesign their software for the cloud. Also among her competitors is software from her previous company, ASK Computer Systems, which she took public in 1981 and sold to CA, then known as Computer Associates International, in 1994.

“I think her timing is perfect,” said Kleiner Perkins Caufield & Byers Investment Partner Ray Lane, who led Kenandy’s funding round and sits on the start-up’s board. “Three years ago you would have had to evangelize the cloud, but…in the next five years, you’ll see a major movement into cloud computing. For an app user who doesn’t care about what computer (the app) sits on and wants to place an order and track it, the cloud is perfect.”

Kurtzig said she decided to expand the software herself rather than integrating it into a third-party accounting package, which was her original plan, at the request of her customers, who said they needed the extra features but wanted all the software to come from Kenandy.

Lane said he told her to do it when he funded the company. “Every company that comes in here, we find something they need to be doing and that was one of the big ones,” he said. “I think ultimately you have to provide financials because they’re tied so closely to production systems and order entry and manufacturing planning and supply chain–it all comes back to financials.”

In any case, there’s been little innovation in enterprise resource planning software until recently. Software from ASK, which Kurtzig launched in 1972, is still the third-largest manufacturing package in revenue, she said.

One of Kenandy’s customers, Persnickety Clothing, a maker of children’s clothes, was using a manufacturing software system based on DOS, the operating system that predated Microsoft Windows, which launched in 1985. Making a change on an existing customer order took 12 steps, said Persnickety Chief Executive Craig Rickenbach.

Because Kenandy’s software is designed for the cloud, it confers advantages for customers that older software does not. Data can be analyzed much faster, in minutes versus hours, Kurtzig said, and users can design their own profiles, so that a chief financial officer, for instance, can have a dashboard reflecting financials that he or she needs to see.

Also, since Kenandy is built on Salesforce.com’s Force.com platform (Salesforce CEO Marc Benioff is an investor), customers can take advantage of the social aspects of Salesforce, using Chatter to communicate quickly with other companies in their supply chain.

“Facebook is a very interesting company, but I think the whole concept of social is even more powerful in business,” she said.

Gartner analyst Donald Feinberg, who followed Kurtzig’s career when she was at ASK, said that with Kenandy she has another chance to build a big company.

“Assuming she’s successful…she becomes a target for companies like Oracle and SAP to buy (Kenandy) to modernize their manufacturing systems quicker than they could do themselves,” he said. “Either she’s really successful or she sells it to the one of the big guys and can retire again.”